Pretoria - Reserve Bank Governor Gill Marcus on Wednesday said she was confident of the integrity of the country's bank notes following reports that faulty notes were in circulation.
News broke at the weekend that there were large quantities of defective R100 notes in circulation. The defects were said to be caused by faulty printing machines. The reports further claimed the defective notes were discovered during an internal investigation earlier this year.
"South African bank notes incorporate a range of the latest cutting edge security features," Governor Marcus told shareholders at the bank's ordinary general meeting earlier today.
She further encouraged South Africans as well as visitors to know their money.
During the meeting, the Governor responded to several questions raised by shareholders on the release of the central bank's 2009/2010 annual report.
A review of the South African Bank Note Company since her appointment had resulted in the suspension of its managing director, Musa Mbhele.
The remuneration of directors of the central bank was also among the questions raised.
Marcus said the matter rested with the bank's board. "The matter is therefore dealt with in terms of legislation, in respect of which all the shareholders have no jurisdiction," she explained, adding that the bank's governor and deputy governor receive an annual salary and do not receive a bonus or incentives of any kind.
"They are also not permitted to hold any remunerated external positions," she said.
Another issue was that of the shareholders demanding 10 percent of the bank's profits. The governor said the bank conducted its business in the interest of the public only. "This demand in our view should not be entertained at all."
In the 2009/10 report, the bank incurred - after tax - losses of R1.05 billion, some of which Marcus said were attributable to the strengthening of the currency, which compounded the reduction in investment income.
Marcus said South Africa was not immune to challenges faced by the global economy, adding that the bank had to carry out its duties in 2009 in a challenging environment.
"We are part of the global economic system and the serious difficulties facing many countries become in one way or another challenges too," she said.
Domestically, recovery from the economic crisis has been fragile with disappointing growth despite the boost from South Africa's hosting of the World Cup.
"The recent crisis has demonstrated the need for central banks to have a clear focus on issues related to financial stability, in addition to a focus on inflation," she said.
The central bank's next annual general meeting is scheduled for 30 June 2011, when it celebrates its 90th birthday.
